Column | What happens now that the Affordable Care Act’s enrollment period has ended?

Perhaps no other subject has received so much attention, yet has remained so confusing to the American public, as the Affordable Care Act. While it does not guarantee free health care, it does provide an opportunity for all Americans to obtain more affordable health insurance regardless of age, gender, disability, or pre-existing medical condition. Despite this much anticipated health care reform legislation, millions of Americans remain uninsured.

As predicted, many of the 8 million Americans who have purchased health insurance in the marketplace to date have been those most in need of medical services, while many healthy uninsured have held off on making a decision.

This outcome impacts the risk pool, since a number of healthy insured individuals paying monthly premiums is required to offset the cost of health services utilized by unhealthy subscribers.

Despite an extension of the open enrollment period to April 15, many people remain uninsured, though, because they are confused or uninformed about ACA. Others have purposefully chosen not to enroll, simply because they believe health insurance is unaffordable to them and paying a relatively minor penalty fits into their budget better.

The Obama administration reported that about 28 percent of the people who bought policies were between the ages of 18 and 34. Typically, many of these young, healthy, uninsured individuals believe they do not need health insurance even though this demographic tends to maintain a lifestyle that exposes them to higher incidences of accidental injury.

For example, John is a 22 year old earning $23,000 a year from two part-time jobs. While neither job offers him an employer-sponsored health care plan, he also has chosen not to purchase health insurance from the federal marketplace.

While playing basketball with friends, he suffers a nasty ACL tear to his left knee. The ensuing medical expenses, even without further complication, could add up quickly considering the costs for imaging, anesthesia, reconstructive surgery, physical therapy, pre and/or post-operative devices such as a brace or crutches, follow-up doctor visits, and possible lost wages.

Had John accessed the healthcare.gov website during the open enrollment period, he would have found that he qualified for a monthly tax credit that could have been applied toward the premium on a health care plan. Even the basic Bronze plan could have provided some solace, since his out-of-pocket expense for this unfortunate and costly accident would have been limited to $6,350. While still a substantial sum, it is far less expensive than facing such an unanticipated financial burden without health insurance.

The moral of the story is that, like it or not, ACA is now the law and informed decisions should be made.

Now that the open enrollment deadline and subsequent extension period to sign up for insurance has passed, some uninsured taxpayers are wondering what happens next. If you did not sign up before the extended deadline, you will now have to wait until the next open enrollment period in November to become insured for 2015.

The ACA’s individual mandate requires most Americans to obtain health insurance that meets a certain minimum threshold of coverage or to pay a tax penalty. The penalty is $95 for each adult in the household and $47.50 for each child under 18 with a cap of $285 per family. The actual penalty fee under the law is defined as the higher of $95 or 1 percent of household income minus the first $10,150 for a single person or $20,300 for a married couple filing jointly. This fee will be paid when you file your 2014 federal income tax return next year.

Unfortunately, paying the penalty does not supplant coverage, and the fee increases every year. For example, in 2015 it will be 2 percent of income or $325 per person – and even higher in 2016.

Fortunately, the ACA has included a provision for extenuating circumstances. Hence, it may still be possible to enroll in a private health plan through the marketplace if you qualify for special enrollment outside of the open enrollment period.

A special enrollment period is available for people who have experienced a “qualifying life event” or have had a “complicating situation.” A qualifying life event could include having a baby, getting married, moving your residence, gaining citizenship, turning 26 and becoming ineligible to remain on a parent’s plan or losing other coverage. A complicating situation would involve an inability to enroll in a health plan because of a natural disaster, enrollment errors, or misinformation/misrepresentation by a non-marketplace agent or broker.

And finally, although Pennsylvania has not expanded its Medicaid program under ACA to potentially include more low-income individuals, you may still apply for the state’s Medicaid or Children’s Health Insurance Program any time you think you and your family may qualify.

Visit www.healthcare.gov or www.medicaid.gov for more detailed information on these various assistance options.

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